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Tue 18 Jun 2013
Close: 47250c 
Day's move: 355c (+0.76%)
Volume: 349 671
Trades: 3 077
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Revenue for the year ended 31 December 2012 was slightly lower at R45.4 billion (2011: R48.6 billion). Operating profit fell to R23.2 billion (2011: R32 billion), while profit for the year attributable to owners of Kumba dropped to R12.2 billion (2011: R17 billion). Furthermore, headline earnings per share lowered to 3 797cps (2011: 5 313cps).
Dividend
At its board meeting on 8 February 2013 the directors resolved to declare a gross final cash dividend of 1 250cps on the ordinary shares from profits accrued during the year ended 31 December 2012. The dividend has been declared from income reserves.
Outlook
A similar level of growth in global crude steel production is expected for 2013 as was seen in 2012, with Chinas crude steel production forecast to grow and reach 740 Mt, whilst growth in crude steel production in other developing countries is expected to be counter balanced by reduced production in some of the developed markets. In 2013, Indian iron ore production is expected to remain under pressure as a result of domestic policy changes. However new supply capacity, primarily from Australia, is expected to partially offset this reduction in Indian supply.
The start of 2013 has seen a rapid price recovery in iron ore prices. The consensus view is that this rally will not be sustained throughout the year. However, some positive sentiment in relation to Chinese steel consumption growth has been restored and is expected to provide support to prices throughout the year. Seaborne iron ore supply growth may lead to iron ore prices softening in the second half of 2013, but on average prices are anticipated to be firmer than in 2012.
As guided previously, waste mining at Sishen mine is anticipated to increase by an additional 30 Mt per year in line with the planned ramp-up that commenced in 2009. However, in order to make up mining volumes lost as a result of the strike, it is anticipated that an additional 10 Mt to 20 Mt of waste further to the 30 Mt previously guided, will be mined in 2013, which will put upward pressure on unit cash costs. Annual production volumes from Sishen mine are expected to increase from the 33.7 Mt achieved in 2012, to at least 37 Mt in 2013, which is lower than previously guided due to the knock on effect of the unprotected strike in 2012.
Kolomela mines ramp-up is on track to produce at full design capacity of 9 Mt in 2013 which will enhance the groups ability to supply iron ore to the market during 2013. Waste mining at Kolomela mine is anticipated to increase as the new pits are opened up, which will put upward pressure on unit cash costs. Kolomela mines cash unit cost is expected to be R180/tonne as the mine reaches full design capacity of 9 Mtpa.
Export sales volumes in 2013 are anticipated to be in line with the volumes achieved in 2012. Domestic sales volumes from Sishen mine to AMSA are anticipated to be 4.8 Mt, in line with the interim pricing agreement. Kumbas operating profit remains highly sensitive to the Rand/US Dollar exchange rate. Managements focus will be on executing the groups strategy by optimising the value of current operations, capturing value across the value chain and delivering on the groups growth aspirations.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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